Articles Posted in Energy

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On August 13, 2019, in a case that may have an impact on the leasing of federal lands for energy development in the future, the U.S. District Court for the Missoula, Montana Division, issued a ruling in the case of Western Organization of Resource Councils v. Bernhardt, which involves the application of the Federal Advisory Committee Act (FACA) to the Department of the Interior’s Royalty Policy Committee. This advisory committee, initially established in 1995 to provide advice to the Secretary on issues related to the leasing of federal and Indian lands for energy and mineral resources production, is subject to the provisions of FACA, codified at 5 U.S.C. app. Sections 1-16. The plaintiffs challenged the operations of this advisory committee, which was reestablished for two years beginning in 2017, because it allegedly “acts in secret and works to advance the goals of only one interest: the extractive industries that profit from the development of public gas, oil, and coal.” More specifically, the plaintiffs alleged that this advisory committee violated FACA because: (a) it was not properly established as provided in the implementing GSA rules (which are located at 41 CFR Section 102-3); (b) did not provide public notice of its meetings and publicly disseminate its materials; (c) ensure that its membership was fairly balanced; and (d) failed to exercise independent judgment without inappropriate influences from special interests.

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ferc_logo-300x300The U.S. Court of Appeals for the DC Circuit decided the case of Allegheny Defense Project, et al. v. Federal Energy Regulatory Commission on August 2, 2019. In a Per Curiam opinion, the court denied petitions challenging the Commission’s orders permitting the Transcontinental Gas Pipe Line Company’s expansion of an existing natural gas pipeline which extends from northern Pennsylvania across the Carolinas into Alabama. The expansion is called the “Atlantic Sunrise Project.” In February 2017, FERC approved the expansion, and denied various petitions, filed by environmental organizations and affected landowners, who then challenged the decision in the DC Circuit. However, the court concluded, on the basis of the administrative record, that these challenges “cannot surmount the deferential standards of agency review and binding DC Circuit precedent.” Under the law, the Commission must consider whether the projected pipeline project meets a market need, and whether the public benefits outweigh the harms. If both criteria are satisfied, FERC will, as in this instance, issue a certificate authorizing the pipeline’s construction, and that certificate also empowers the certificate holder to exercise eminent domain authority under to the Natural Gas Act when necessary. It was the latter consequence of the FERC’s determinations that caused several Pennsylvania landowners to file their objections with the Commission and seek to stay construction.

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On June 21, 2019, the White House Council on Environmental Quality (CEQ) issued draft guidance clarifying the treatment of greenhouse gas (GHG) emissions in environmental impact reviews of federal projects under the National Environmental Policy Act (NEPA). Those wishing to comment on the draft must submit comments within 30 days after it is published in the Federal Register.

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On April 10, President Trump issued two Executive Orders (EO) relating to the revision of some aspects of federal energy policy and development.

1. The first EO is very comprehensive, affecting many federal agencies and departments, and is entitled “Promoting Federal Infrastructure and Economic Growth.” The EO emphasizes its concern with the need for infrastructure that “ is capable of safely and efficiently transporting these plentiful resources to end users.” To that end, the EO:

(A)     states the general policy that the U.S. Government is to promote private investment in the Nation’s infrastructure by establishing efficient permitting processes and procedures that avoid duplication and result in increased regulatory certainty;

(B)     reviews and revises existing federal guidance and regulations regarding Section 401 of the Clean Water Act (CWA), with particular emphasis on EPA’s guidance document, CWA Section 401 Water Quality Certification, and actions will be taken in accordance with a regulatory schedule set forth in the EO which has as its objective a notice of proposed rulemaking on the Environmental Protection Agency’s (EPA) Section 401 regulations to be published in 12 months, with the final rules to be issued by May 2020;

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On February 27, the U.S. Supreme Court reversed a ruling of the U.S. Court of Appeals for the District of Columbia Circuit and held that international organizations, such as the World Bank, while being protected by the International Organizations Immunities Act of 1945 (IOIA), are not absolutely immune from lawsuits filed in federal court because the protections afforded by the IOIA are tempered by the 1976 Foreign Sovereign Immunities Act (FSIA). The case is Jam, et al. v. International Finance Corp.

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On March 1, the U.S. Court of Appeals for the District of Columbia decided National Parks Conservation Assoc. v. Todd T. Simonite, Lieutenant General, et al. The case involves an application to the U.S. Army Corps of Engineers (Corps) for a construction permit to build electric power lines over the “historic James River, from whose waters Captain John Smith explored the New World.”

The Corps concluded after reviewing the thousands of comments submitted to it in connection with this application, and after considering the views of several government agencies and conservation groups, that an Environment Impact Statement (EIS) was not required, and that its Environmental Assessment assured the Corps that the project would not result is significant environmental impacts. The Court of Appeals has concluded that, based on this evidence, the Corps’ refusal to prepare an EIS thoroughly discussing all these points was arbitrary and capricious. The Corps has been ordered to prepare the EIS and to take special note of its obligations under the National Environmental Protection Act (NEPA), the Clean Water Act (CWA) and its obligations under the National Historic Preservation Act.

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Most companies have been involved in a situation where they want to end their relationship with another company, or with an employee, and to permanently terminate their mutual obligations (e.g., a settlement agreement resolving end-of-project litigation). In 1992, a California Court of Appeals, in Winet v. Price, confirmed that upholding general releases is “in harmony… with a beneficial principle of contract law: that general releases can be so constructed as to be completely enforceable.”

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President Trump signed an Executive Order yesterday January 31, calling on executive branch departments and agencies to encourage recipients of defined types of new federal awards to use cement, iron, steel, aluminum and certain manufactured products produced in the United States. The order builds on prior authority (Executive Order 13788 (April 18, 2017)) focused on procurements by the departments and agencies themselves. The new order extends the “Buy American” conversation to private parties that receive new support, to promote the use of domestic sources in their onward purchases.  It addresses programs that receive Federal financial assistance, 2 C.F.R. § 200.40, for creation, maintenance or repair of infrastructure projects.

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Recently, our colleagues Amanda Halter, Stella Pulman and Ashleigh Acevedo published their Client Alert titled BSEE Decommission-in-Place Discussions Present Opportunity discussing the Department of Interior’s Bureau of Safety and Environmental Enforcement’s (BSEE) Request for Information Regarding Potential Impacts of Decommissioning-in-Place of Pipeline-Related Infrastructure in Deepwater.  Takeaways include:

  • BSEE is asking for input on technical, safety and environmental and other factors that should be included as decom-in-place decision-making considerations for pipeline infrastructures in deepwater on the Outer Continental shelf (OCS).
  • Companies with potentially affected assets have an opportunity to advance more predictable and holistic decision-making by commenting on whether and under what circumstances the BSEE should allow decommissioning-in-place of these pipeline-related infrastructures.

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On January 14, the Colorado Supreme Court issued a unanimous opinion that the Colorado Oil and Gas Conservation Commission (Commission) properly declined to undertake a rulemaking proceeding that was designed to preclude the Commission from issuing new permits unless the “best available science,” as confirmed by the findings of an independent third-party organization, determines that the drilling will occur in a manner that does not cumulatively impair the state’s atmosphere, water, wildlife, land resources and does not contribute to climate change. The case is Colorado Oil and Gas Conservation Commission, et al., v. Martinez, et al.

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